Tensions reignited over the weekend when Trump threatened to raise tariffs on Chinese goods to as high as 100% in retaliation for Beijing’s new export rules. China responded by promising “countermeasures” if the U.S. follows through.

The escalation has shaken global markets and revived fears of a repeat of the severe trade standoff earlier this year, when tit-for-tat tariffs brought the world’s two largest economies close to a full economic rupture. The current clash also threatens to reverse months of fragile progress made through ongoing negotiations.

A planned meeting between Trump and Chinese leader Xi Jinping later this month in South Korea is suddenly in doubt. Trump hinted the summit could be canceled, though Treasury Secretary Scott Bessent insisted on Monday that it is still expected to move forward. China’s Ministry of Commerce said it remains open to talks, but criticized Washington for engaging in diplomacy “with one hand while threatening sanctions with the other.”

Beijing: The U.S. started it

Chinese analysts argue that Washington triggered the latest confrontation. In late September, the U.S. dramatically expanded its export blacklist, adding thousands more Chinese companies and subsidiaries, severely limiting their access to American technology.

Jin Canrong, a professor of international relations at Renmin University and a government adviser, said China is merely responding to U.S. aggression. “After striking China first, the U.S. now pretends to be the victim,” he wrote on Weibo.

Wu Xinbo, director of the Institute of International Studies at Fudan University, said confidence between both sides eroded rapidly. He said relations appeared to be stabilizing after talks in Madrid in September and a follow-up phone call between Trump and Xi, during which Xi warned against “unilateral trade pressure.” But just 10 days later, Washington expanded export restrictions again, which Beijing viewed as a severe provocation.

“These moves once again show Trump is negotiating in bad faith,” Wu said.

China’s Commerce Ministry also condemned U.S. proposals to impose new fees on Chinese cargo ships at U.S. ports, calling the measures “harmful to the negotiation atmosphere.”

A trade war on the edge again

Paul Triolo, a China and technology analyst at Albright Stonebridge Group, said the situation resembles the breakdown in relations earlier this year. “We’re standing at the edge of an abyss again,” he warned, “but now both countries know how much damage this can cause.”

After a brief trade truce in Geneva where both sides agreed to roll back tariffs, Trump made a string of aggressive policy moves:

• Banned global firms from using Huawei AI chips

• Tightened semiconductor export rules

• Threatened visa bans on Chinese students

Many analysts say China’s response—tightening control over rare earth minerals, which it dominates globally—is a strategic counterstrike, not an act of aggression. Rare earths are essential in electric vehicles, military systems, smartphones, batteries, and semiconductors.

China mirrors U.S. strategy

Beijing expanded its rare earth export restrictions to include processing technologies and overseas users, meaning even foreign companies using Chinese technology could be restricted. Factories across the automotive and defense sectors have already reported shortages following earlier licensing requirements in April.

China insists the new rules aren’t an export ban, but companies must now apply for approval—a powerful leverage tool. Analysts note that Beijing is now adopting U.S.-style export controls, similar to the Foreign Direct Product Rule used by Washington against Chinese chipmakers under the Biden administration.

Wu from Fudan University said China is keeping record of every U.S. measure:
“From Trump to Biden and back to Trump again, the U.S. has built a wall of tariffs and technology bans. Now China is answering.”

“America still relies on China for rare earths,” Wang said. “The reality is simple: cooperation is better than confrontation.”